Narrow Web Profile: G-3 Enterprises

Focusing strictly on wine and spirits labeling, this California converter wants only the challenging work.

Jack Kenny01.11.07

Something rather unusual — some might say most unusual, perhaps unprecedented — occurred in October at the TLMI awards banquet in Orlando. A company that had been printing labels using flexography for only two years won the Best of Show award for a flexo wine label. For that Bridlewood Syrah label the company also won a first place award in a flexography wine and spirits category. That's not all: It took two other first place awards and one second place prize.

The company is G-3 Enterprises, located in Modesto, CA, USA. Its label division is one of several units in the group (others specialize in bottle closure manufacturing, logistics and real estate). The printing operation has been around for more than two decades, but its focus on labels began in the early 1990s, and its products were sheetfed offset glue-applied labels for wines.

G-3 waited out the 1990s and the first few years of this decade before moving into narrow web flexo label production. When it did, the move was swift and successful, and it has the awards to prove it.

The label division today is focused intently on wine and spirits labeling, and seeks only challenging work. It is committed to continuous improvement, to sound environmental practices and to hiring and empowering the best employees.

G-3 Enterprises has a legacy. It is owned by members of the Gallo family's third generation — Gallo being the well known wine family of California. These family members developed separate businesses in the orbit of the wine industry, and in 2003 pulled them together as G-3. The combined company has grown well through centralized marketing efforts and a focus on quality customer service.

Tom Gallo is director and general manager of the label division. A graduate of California Polytechnic Institute in graphic communications, he has always been a printer, and he has specialized in beverage labeling. To him, and to the members of his team, these market segments are distinct and require special knowledge and attention.
"There are some players in the wine and spirits label industries who do very well," he says. "There have been others who see a very profitable business, because they are looking at the market through the glasses of a commodity label company that doesn't have to provide extra services and produce the level of quality that the wine market and spirits market require. We have seen companies come in, we've seen companies go out, companies go under. We've seen them bought up. We have seen individuals and investors look at this market for opportunities because they see high margins. But this is a different market with

Alex Torro, right, works at the Gallus EM 280 press along with Bruce Harris.

a different challenge. Different customers have different levels of demand. When you have a $10, $20, $50, or $80 bottle of wine, the label is very important to marketing the brand. They want that label to be perfect, and they want to be able to create unique looks through technologies.

"Our level of service to the wineries and distillers is to help and assist them with application, with new label design, how to get more shelf impact, consumer impact, with unique designs and combination printing. Combination printing is one of the reasons we went with Gallus presses. The majority of our labels are multiple foils, high-build coatings, rotary screens.

"We have had to come up with the equipment technologies and the material technologies to provide a unique product to that market. The demand to produce 100 percent quality is incredible," Gallo says. "It's not something that is probably normal in other food and beverage products, where they are more concerned about running faster and producing more labels, maybe at a lower cost. In our organization, what we do today we have to do better tomorrow.

As with all converters, G-3 feels the pressures of price and cost. Several aggressive approaches are in operation at G-3 to maintain top quality, offer competitive prices and earn profit.

"We have to produce quality, but at the same time we are getting pushed and squeezed out there in pricing and margins," Gallo says. "So not only do we have to produce the best quality, but we have to become more efficient and drive out waste. It is absolutely critical for us to survive to be the lowest cost producer in the industry. The whole market is feeling this pressure, but the big guys are getting squeezed by their big players, the Wal-Marts and Targets and all the chain stores, and that translates right down to the packaging suppliers.

"Every year we have to examine how we can offset our increasing costs of manufacturing through our technologies and through our processes. Wages aren't staying flat, energy's not staying flat. We are aggressively working with our materials suppliers to get a more consistent production plan for them so they can get longer runs, to try to offset their costs. We are not just cutting price at the same cost, because that will drive us out of business, and it will not serve our customers well, because if we are not able to invest in the technologies, to really provide our customers with the things that they truly need and want, we are not going to be able to stay with the latest and greatest technologies, as well as having the best, most capable people."

Romancing the spirits

G-3's label division operates five days a week around the clock, and on weekends during peak times. This year the company will reach 90 employees.

The vast Gallo portfolio of wines obviously has been a significant part of G-3's production, but Tom Gallo says that's changing. "By end of this year our work will be about 50 percent outside of Gallo. We really focus on value add: We are looking for labels that are very difficult to produce, that require tight registration, multi-process work and difficult materials. We don't want to compete, and probably couldn't compete, on a non-value add label. Our structure is built around complexity. The higher the complexity of the label, the better our company does."

Wine label production has dominated at G-3, but labels for distilled spirits are starting to take a share. "Because of the complexity of a lot of spirits labels, that has become a new market for us," Gallo says. "We are one of the primary suppliers of labels for Bacardi worldwide. That's our first entry to spirits. This year we will aggressively target the spirits market through sales representation that will solely focus on spirits."

The move to flexo

Tom Gallo says that he always considered flexo to be a viable alternative in his company. "We had a vision when we got into the pressure sensitive label market with flexo that we could be a unique player and provide a serious product with flexo. What surprises us now is that we have been able to take it further — and we had some pretty high expectations — than we realized we could take flexo. What we are printing — the dot sizes, the vignettes, the uncoated stocks — has really amazed our whole team, and we are delighted that we are able to do that."

Two years ago, G-3 retained the services of G&D Flexographic Services, a consulting firm formed by Gil du-Long and David Hoydal, two award-winning flexo experts based on the West Coast. "Dave and Gil were early adopters in taking flexo and producing really high quality labels. They did things that people didn't realize could be done. We used their expertise in helping us evaluate our new flexo program."

Danny Stone, the lead ink specialist, oversees mixing and testing of all inks. Nearly 95 percent of the colors used by G-3 Enterprises are custom blended.

40 percent of the company's output comes from the Gallus presses.

"When we started the flexo operation we said we probably can do 80 percent of what we wanted to do with this, and maybe someday we'll need to get an offset press to get the other 20 percent. Today we don't need another offset press. That's unanimous among our sales team, our operators and our team lead."

One of the factors that helped G-3 get up and running quickly with the flexo operation was the latest plate technology. The company uses a Creo (now Kodak) direct to plate imager, and the DuPont FAST plate processor. "It has a dramatic impact, and gives us the ability to produce small dots. When you combine the direct-to-plate with the quality that the Gallus presses have, the skill level of our operators and our constant focus on continuous improvement, we have been able to produce some great quality. When you think about it, we have been in the flexo narrow web label business for two years, and in our second year we won Best of Show. That's pretty impressive."

Continuous improvement

When he talks about the business, Tom Gallo constantly refers to "the team" with admiration. "Our team has a passion for quality. When we sit in a meeting and talk about label production and issues and opportunities, they are very passionate about what they do, about their customers, about producing quality, and they get very excited when they see those opportunities. When they see things that fail they get disappointed and take it personally. I believe that we have an incredible culture around high quality production and complexity.
Continuous improvement — the practice of measuring and evaluating every aspect of production with the goal of increasing value and reducing waste, among others — is a reality at G-3, not a concept that is just talked about. The many aspects of continuous improvement, Gallo says, have worked their way into the working lives of all involved.

"First, it's really part of our culture. Our employees are deeply involved in their jobs. This is not a company that dictates to departments or employees how to do their jobs. We are the type

of company that works to support employees in their jobs. We have an aggressive employee training program. There's not a lot of talent out there waiting to be picked up, so the industry has to produce its own talent. For us to produce quality and get onto the path of continuous improvement we have to have an aggressive development program, which is a documented training program for every position.

"Everybody's involved. We have team meetings, and the employees are excited, motivated and contributing to what it is we are going to do differently to make our products better, to help us become more efficient.

"Second is process control. We measure all of the critical processes: color control, registration control, print to cut, overall size, dot gain. It's fundamental but it's critical: measuring the critical processes and teaching our employees how to utilize the measurement tools, understanding what it means and what to do when it's outside of our control range.

"Finally, we need to fully utilize Lean methodology of value stream mapping, and really look at every process, the workflows, to find and eliminate the wasted energy, the wasted steps.

"Those are the core pieces of continuous improvement. The more you measure the more you understand cause of variation; the more you understand cause of variation the more you can eliminate it, which helps us to reduce downtime and waste."

Heading the continuous improvement program is Mary Williams, director of

The G-3 Enterprises Label Division headquarters in Modesto, CA

quality systems. Gallo notes that the company employs process engineers and process technicians, who gather data and analyze. "The process engineers conduct research and utilize advanced analysis to assist operators in understanding cause of variation. The operators are running the press and producing labels. The process engineers work with each department to help them analyze that data and troubleshoot, and come back and work with the operators. It's an old saying, but it's true: If you don't measure it, you can't improve it.

"We have a long way to go to be benchmark," says Gallo. "We are a young company, we have good technology, we have the right attitude, and that attitude is good people with good mindsets, and we have a desire to improve."